The record, as it now stands: the EU Council of Ministers approved the European Commission’s anti-subsidy tariffs on battery electric vehicles imported from China in late 2024, duties that range from 7 % to 35 % and stay in force for 5 years. Beijing has answered by challenging the measures at the World Trade Organization. The probe that produced them began with an announcement by Commission President Ursula von der Leyen in September 2023, and it has settled, for now, into a standoff among allies as much as adversaries.
China’s first reaction was sharp. The government called the investigation “a naked act of protectionism”, stoking fears of a trade war; those fears eased after EU Trade Commissioner Valdis Dombrovskis travelled to China, where Vice Premier He Lifeng agreed to working groups on financial services and trade. Both sides, the record shows, chose to manage a relationship worth $900 billion rather than rupture it.
Within the bloc, the loudest dissent came from Berlin. German Chancellor Olaf Scholz, speaking at the Berlin Global Dialogue forum, poured cold water on the case and warned against protectionist moves that could harm German industry: “We want to sell our cars but that means we are also open to receive cars from other countries,” he said, before asking “what is the problem?” Germany, which had sold 4.6 million cars in China the year before, stood to lose most if Beijing shut its market in reply.
The economic case is contested on its own terms. Daniel Gros and Weinian Hu, in a policy brief from the Institute for European Policymaking at Bocconi subtitled “Industrial Policy and Geopolitics in Disguise?”, mark three firsts: the EU’s first anti-subsidy investigation opened on its own initiative, its first such case to proceed without a parallel anti-dumping claim, and the first ever for a product where the Union is a net seller abroad.
The authors’ findings cut against the duties. At the time of the investigation the European BEV industry appeared healthy, and the bloc still ran an important BEV trade surplus. European buyers, the brief notes, pay far more for the Chinese-built cars than Chinese consumers do; that is the reverse of dumping. Outright public subsidies flowing to Chinese producers, through grants and tax relief, are comparatively small. The Commission’s argument instead is that Chinese industrial policy distorts entire markets, leaving producers to buy credit and batteries below market prices.
Officials confirmed that none of this settles the file. The WTO challenge is pending, the duties run for years, and Brussels must shield its industry without igniting the trade war the German chancellor warned against. On the timeline, his question still hangs there: German cars sell in Korea and Korean cars in Germany, so what, precisely, is the problem?
Sources
- Policy Brief n.39 – The EU's Anti-Subsidy Investigation Against Chinese Battery Electric Vehicle Imports | IEP@BU
- German chancellor downplays EU probe into China's electric vehicles | Fortune
